China's outward foreign direct investment and exports diversification: an asymmetric analysis. Issue 2 (3rd August 2020)

• Record Type: Journal Article
• Authors: Rehman, Faheem Ur; Ding, Yibing; Noman, Abul Ala; Khan, Muhammad Asif
• Is Part Of: Journal of Chinese economic and foreign trade studies. Volume 13:Issue 2(2020)
• Page Start: 45
• Page End: 69
• Publication Date: 2020-08-03
• Subjects: China -- OFDI -- NARDL -- Export diversification; E23 -- F14 -- F21 -- O10; China -- Foreign economic relations -- Periodicals; China -- Economic conditions -- Periodicals; Business enterprises -- China -- Periodicals; 330.951
• DOI: 10.1108/JCEFTS-12-2019-0065
• Languages: English
• ISSNs: 1754-4408

Abstract

Abstract : Purpose: Over the past two decades, China's outward foreign direct investment (OFDI) has risen remarkably. Whether such an increase affects the Chinese export diversification (ED) is a significant issue that has surprisingly remained unaddressed. This study aims to explain this issue that how OFDI plays a vital role in symmetric and asymmetric effects on its ED. Design/methodology/approach: The authors introduce a robust nonlinear autoregressive distributed lag (NARDL) model. Ironically, the purpose of this study is to analyze the symmetric and asymmetric effect of OFDI on ED. Findings: The authors propose that growing OFDI would be more advantageous to China, rather than the policies of contraction. Therefore, the study provides valuable policy insights to consider the long-run asymmetric momentum given to ED by China's OFDI. Originality/value: The results of this study may seem to be an important newsletter for further policy discussion on how China can catch up on the benefits of ED through OFDI.